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Some selected comments on last week’s market turmoil from newspapers and magazines around the country:

Financial Chernobyl?

We hesitate to use that incendiary phrase to describe the chain reaction that’s wreaking havoc on stock markets around the globe. Not, heaven forbid, that we’ve gone soft and are fearful of adding fuel to the gathering panic. For gosh sakes, we’re a journalist, and yelling “fire!” in a crowded theater is what journalism is all about.

No, our reluctance is inspired by nothing so altruistic. Pure and simple, we don’t think the analogy does justice to the gravity of the devastation being meted out to poor innocent equities everywhere. How can anyone compare the seriousness of a little nuclear accident near Kiev that soon blew over (don’t ask us over what) with the $2 billion suffered by George Soros on his Russian investments?

Alan Abelson, Barron’s

Although Russia is no more important in the American export picture than, say, the Dominican Republic, the meltdown of the Russian economy is of great psychological importance because it threatens worldwide confidence in the U.S. economic model. The American free-market growth model has real problems when it is applied on a world stage in countries where commercial law is primitive, where bankers are very bad at risk management, and where corruption and cronyism (not unknown in the U.S., by the way) reign supreme.

William Wolman, Business Week Chief Economist

We should not fool ourselves that the recent sell-offs in world stock markets simply reflect a nervous reaction to Russia’s turmoil or a long-overdue “correction.” They signify instead a gathering fear that the global economy is drifting toward a dangerous slump, driven by forces that world leaders only vaguely understand and seem powerless to affect. Even those supposed titans of global finance Treasury Secretary Robert Rubin and Federal Reserve Chairman Alan Greenspan give little hint publicly that they grasp the threat or know what to do about it.

This is no longer a minor “Asian” crisis. Japan’s recession is its worst since World War II. Latin America’s economies are slowing. Russia’s depression hurts its Eastern European trading partners. China is slowing. Together, these areas represent almost half the world economy’s output. The United States and Europe, with 40 percent of global gross domestic product, cannot easily escape the fallout.

Robert J. Samuelson, Washington Post

During the past two years, the euphoric market has become less a white-collar bastion and more a blue-collar casino. As ever in financial history, the entry of the “little people” onto the financial stage suggested that the curtain was set to drop. And again, the magnitude of the trend should have made the danger unmistakable As happened in the 1920s, high-spirited contemporary pundits promised us endless blue skies, a world blessedly free of market corrections, business cycles and bear markets. Their case for the bull market hardened into a mantra, chanted ad infinitum by many brokerage house analysts; the combination of low inflation, low interest rates and slow growth might last forever. That a speculative bubble could coexist with a sound economic boom that it could, in fact, be inspired by an unusually prolonged expansion was scarcely mentioned as a possibility.

Ron Chernow, author (New York Times commentary)

In case you haven’t noticed, the Clinton Administration and the Federal Reserve have been curiously quiet about the latest problems on Wall Street.

So why weren’t Treasury Secretary Robert Rubin and Federal Reserve Chairman Alan Greenspan on the job?

It could be that they are comfortable with the stock market moving lower, figuring that a gradual decline is better than a sudden one. Or maybe Washington has decided to work behind the scenes to prop up the market.

Whoever it was, the equities markets in New York opened positively on Friday morning but proceeded to fluctuate wildly throughout the day. If the early-morning trading hadn’t taken place, the previous day’s disaster may have continued unabated.

There has been strange trading like this before, and some people myself included believe the mysterious hand of the government has on rare occasion intervened in the market. But given what is going on in Washington these days, this might be the most practical way to avert a financial crisis.

John Crudele, New York Post

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